Israel halts transfer of tax funds to PA

PA minister says salaries to 170,000 civil servants may not be paid; Fayyad says decision would not dissuade Palestinians from achieving unity.

Palestinian Unity Egypt 311 (photo credit: REUTERS)
Palestinian Unity Egypt 311
(photo credit: REUTERS)
The Palestinian Authority on Sunday warned that it would not be able to pay salaries to its civil servants because of the government’s decision to temporarily halt the transfer of millions of dollars in tax revenue to the PA in response to the Hamas- Fatah unity deal.
PA Minister of Economy Hassan Abu Libdeh said that at least 170,000 civil servants would be affected if Israel carried out its decision.

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Abu Libdeh told the Bethlehem- based Maan news agency that Israel has been transferring $80 million- 100m. in tax revenues to the PA each month. The PA would face a financial crisis if it did not receive the money, he said.
The government’s decision violated international law and was an “assault on the Palestinian economy,” Abu Libdeh said. The PA was seeking the help of the international community to force Israel to backtrack, he added.
PA Prime Minister Salam Fayyad said Israel’s decision would not dissuade the Palestinians from achieving unity between Fatah and Hamas and establishing a state.
Fayyad said the PA was ready for statehood and that its institutions were capable of providing the best services to the Palestinian people.
“In light of these achievements, all what’s left for us to do is to step up efforts to end the division [between Hamas and Fatah] and reunite the two parts of the homeland,” he said. “These [Israeli] threats surely won’t stop us.”
Saeb Erekat, former chief PLO negotiator, condemned the Israeli decision, saying it was designed to sabotage the peace process and thwart the PA’s efforts to establish an independent Palestinian state.
Addressing Israel, Erekat said, “Those who want peace must realize that it would be achieved through reconciliation, democracy and elections.”
Finance Minister Yuval Steinitz, however, said that if the PA wanted peace, it could not unite with Hamas.
If Hamas would accept the conditions set out by the Quartet, that it renounce terrorism, recognize Israel and agree to abide by past agreements, Steinitz said his reaction as well as that of Israel would be different.
More significantly, Steinitz added, critical questions had not been answered, particularly with respect to finances.
Would they have unified or separate finances? he asked.
If it were a joint Hamas- Fatah account, “it is obvious that Israel can’t transfer funds to a terrorist organization,” Steinitz said. If the financing remained separate, Israel would need assurances from the PA that its funds would not be funneled in some fashion to Hamas, he said.
Given the lack of clarity on these matters, Steinitz canceled a meeting he had set for Sunday with Palestinian officials to determine how much was owed to them in taxes.
Israeli and Palestinian officials typically meet at the start of each month to determine how much is owed the Palestinians in tax funds. Last month, Israel transferred NIS 380,000 to the PA.
Israel has twice before stopped the transfer of tax funds to the PA altogether: from December 2000 until July 2002 after the second intifada broke out, and from February 2006 – after Hamas won the Palestinian legislative elections – until July 2007, after Hamas seized control of the Gaza Strip.
Steinitiz’s postponement of Sunday’s meeting delayed the transfer of the funds, but did not halt it indefinitely. Such a step would have to be taken by either the security cabinet or the full cabinet.
An Israeli official told The Jerusalem Post that the cabinet would likely approve such a measure should Fatah and Hamas unite and form a joint government.
The official said the transfer of tax funds from Israel to the PA was set out in the Oslo Accords, but that since Hamas had sworn not to abide by that agreement, it could not turn around and say that Israel should hold to its terms.
Israel is not the only government that does not want to transfer money to Hamas. Many countries will find this politically and legally problematic, the official said.
Funding is just one of the many problems that would be created by a unity Fatah and Hamas government, the official said.
Such a government would raise many questions about security arrangement that exist between Israel and the PA, as well as issues of movement and access in the West Bank, the official said.
Israel has removed many IDF checkpoints that it might now have to restore if it could not depend on a Palestinian government for security, the official said.
Prime Minister Binyamin Netanyahu is expected to raise the issue of a Fatah-Hamas unity deal when he travels to London and Paris later this week.
At Sunday’s weekly cabinet meeting, Netanyahu said that the unity deal “must concern not only every Israeli, but all those in the world who aspire to see peace between us and our Palestinian neighbors.
“Peace is possible only with those who want to live in peace alongside us, and not with those who want to destroy us,” he said. “Israel extends its hand in peace to all peoples of the region, to all of our neighbors who aspire to live alongside us in peace, and will stand steadfast against whoever tries to attack us and endanger our existence.
I will deliver this clear message to world capitals, and especially to European leaders, during my visits to London and Paris this week.”